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20 June 2011

Oxfam's Foreign Aid 101

Oxfam has done a nice job in creating an informational tool about how US foreign aid is allocated and structured. For someone who does not know very much about the topic, this introduction provides an overview with enough depth that it creates a stronger understanding of what parts constitute the US foreign aid budget and the ways that it can be applied effectively.

Noteworthy is the section which illustrates good aid and bad aid. In the bad aid section it says:

When donors do not take into account local needs and demands and bypass governments and local communities, aid is ineffective and unsustainable and fails to reach the people who need it most. In Afghanistan, despite some laudable efforts, US aid is still overly reliant on contractors and provincial reconstruction teams to deliver assistance rather than relying on Afghans themselves. For example, a US-funded highway in the northern provinces of Afghanistan is plagued by wasteful spending and threatens the homes of the people who live in a nearby community. Before construction on the road could begin, the $15 million project had to pass through the hands of three different consulting companies. As a result, not enough money was left to purchase the materials necessary to build a decent road once expenses and salaries were paid to each consultant. As one senior USAID contractor put it: “So you have contract after subcontract after subcontract, which just kills everything. Multiple contracts, then an Afghan guy digging the road—why not straight hire the Afghan?”